NEW YORK, August 10, 2026, 09:16 EDT — U.S. equity markets remained closed in early trade ahead of the Nasdaq’s main session, which opens at 9:30 a.m. EDT.
- Varex shares were at $18.40 in premarket trading, marking a 48.3% increase from Friday’s closing price of $12.41.
- Teledyne proposed to acquire each share for $18.90 in cash, putting the deal’s value near $1.1 billion.
- The $0.50 spread on the deal offers a gross return of 2.7% if the purchase is completed at the announced price.
- Varex posted preliminary revenue for the quarter at $210.5 million, with adjusted earnings reaching $0.31 per share.
Shares of Varex Imaging Corporation NASDAQ:VREX surged 48.3% during premarket trading after Teledyne Technologies Incorporated NYSE:TDY reached a deal to acquire the X-ray equipment manufacturer. The cash offer stands at $18.90 per share, giving the deal an approximate value of $1.1 billion.
The key question for investors is now the remaining spread. Varex shares traded at $18.40, which is $0.50 less than the offer price. This represents a 2.7% gross potential upside, not accounting for time, taxes, or the risk associated with the deal.
The bid represents a 52.3% premium over Friday’s closing price and is 8.6% higher than the most recent $17.40 average analyst target. The agreement has sidelined discussions over independent valuation.
| Deal measure | Value | Investor reading |
|---|---|---|
| Friday closing price | $12.41 | Unchanged reference price |
| All-cash bid | $18.90 | 52.3% markup |
| Premarket quote at 09:07 EDT | $18.40 | 97.4% of bid price |
| Outstanding differential | $0.50 | 2.7% headline gain |
| Total transaction size | About $1.1 billion | Covers stock incentives and net liabilities |
| Projected closing | Early 2027 | Pending further approvals |
The transaction received unanimous approval from both boards. Completion remains subject to Varex shareholder consent, regulatory approvals and standard closing conditions. Teledyne anticipates finalizing the deal in early 2027.
Teledyne Executive Chairman Robert Mehrabian pointed to a distinct product shortcoming. “For example, while Teledyne produces X-ray detectors, we do not provide detectors suited for high-radiation environments such as oncology, as does Varex,” he said. Joint company announcement
Varex CEO Sunny Sanyal stated that Teledyne’s resources might accelerate the uptake of Varex offerings. He also pointed to a quicker rollout of advanced imaging systems.
The offer came alongside Varex’s initial results for its fiscal third quarter. Revenue increased by 3.7% to reach $210.5 million. Adjusted gross margin was up 3.2 percentage points, and adjusted earnings more than doubled.
| Fiscal third-quarter metric | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $210.5 million | $203.0 million | up 3.7% |
| GAAP gross margin | 36.4% | 33.3% | rise of 3.1 percentage points |
| Non-GAAP gross margin | 36.7% | 33.5% | increase of 3.2 percentage points |
| Non-GAAP operating margin | 11.6% | 8.2% | up 3.4 percentage points |
| Non-GAAP diluted EPS | $0.31 | $0.13 | surge of 138% |
| Adjusted EBITDA | $33.1 million | $27.5 million | up 20.4% |
A detailed review of earnings quality is necessary. “The quarter also included the recovery of tariffs that had increased our product costs in prior periods,” Sanyal said. Varex obtained $17 million from U.S. Customs and set aside $7 million for potential customer reimbursements. These factors combined to boost quarterly gross profit by approximately $10 million. Varex results
Revenue, after the customer adjustment, totaled $210.5 million. Product sales had reached roughly $217 million prior to that adjustment. Sanyal attributed growth to demand from industrial customers as well as cargo and vehicle inspection systems.
| Revenue segment | Fiscal Q3 2026 | Fiscal Q3 2025 | Change | 2026 mix |
|---|---|---|---|---|
| Medical | $134.0 million | $142.1 million | -5.7% | 63.7% |
| Industrial | $76.5 million | $60.9 million | +25.6% | 36.3% |
| Total | $210.5 million | $203.0 million | +3.7% | 100.0% |
Varex reported cash, equivalents, and marketable securities totaling $99.2 million at the close of the quarter, compared to $155.1 million at the end of the fiscal year. Cash declined due to debt refinancing and increased inventory.
Analysts’ target prices did not reflect the total value of the deal. The average target was $17.40, which is $1.50 less than the offer. On Monday, Sidoti downgraded Varex to Hold and set a $19 target, closely aligning with the cash offer.
| Analyst or group | Latest listed action | Rating | Price target |
|---|---|---|---|
| James Sidoti, Sidoti | Downgraded August 10, 2026 | Hold | $19 |
| Anderson Schock, B. Riley | Reiterated May 29, 2026 | Buy | $18 |
| Suraj Kalia, Oppenheimer | Maintained May 8, 2026 | Buy | $18 |
| Five-analyst consensus | As of August 10, 2026 | Buy | $17.40 average; range $12-$20 |
The group of five analysts included three with strong buy ratings, one with a buy, and one hold. These assessments were rendered outdated following the announcement of the cash offer. Consensus figures were provided by S&P Global, with individual analyst moves tracked by TipRanks.
Risks: The transaction may collapse or be postponed should shareholders or regulators reject it. If talks end, the $18.90 benchmark disappears. Friday’s closing price of $12.41 highlights the risk of decline. Additionally, the most recent margin boost was helped by a tariff refund, making it less likely to recur.
Varex called off its planned earnings call and did not provide guidance due to the ongoing deal. Shareholders now require the proxy statement, the outcome of the shareholder vote, and the regulatory timeline to assess if the outstanding 2.7% spread compensates for the risk of the deal not closing.
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